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Entry for May 7, 2008
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Councilman Cecil Gutierrez was joined by his colleague Kent Solt in trying to generate substantive discussion by Loveland's City Council over the final passage of a $4.5 million Annexation agreement where the city is paying property owners to annex into Loveland.  (see story on LovelandPolitics.com)

Councilman Walt Skowron, who voted against the proposed pre-annexation agreement on the first reading changed his vote May 6, and instead supported the agreement on final passage.  Conversely, Solt reversed his original support for the annexation and voted no on the second reading of the ordinances enacting the agreement.



At issue is the high cost of the annexation and lack of planning for traffic mitigation along the 402 corridor which will now require widening if the area is to host new retail in the area along the I-25.  Mayor Pielin argued that the state or other future taxes like an RTA will probably come along and solve the problem.

City staff contacted by LovelandPolitics confirmed the "uphill sewer" line required for the project has a cost that was grossly understated by the city manager.  The agreement makes the city (instead of the property owner) pay the cost of installing a sewer to accommodate their new developments in the future.  While the city estimate started at over $3 million it was later revised to somewhere around $2.4 million.



Councilman Kent Solt stated, "I think we are just paying too much for this." when explaining his opposition.



Any comments?

2008-05-07 15:01:24 GMT
Comments (10 total)
Author:Anonymous
I don't understand something. Some of the Councilman said it wouldn't cost the city anything while others said it would cost millions.

Who is correct?
--Sue
2008-05-08 05:17:09 GMT
Author:Anonymous
I think they are calculating future projected tax revenue as "payback" for the city. Than they say the total outlay is $800,000.

A curious issue was the City Manager admitting he was raiding the enterprise funds to pay for the water share subsidies. I don't believe this is a legal use of an enterprise fund.

An enterprise fund is required to use the monies collected from users only to provide that the service. Otherwise, for example, an increase in the water rates would require a vote before it could be inacted (under TABOR)since it would really be a general tax and not a fee for a specific service.

When you intentionally pay over market rate for water shares as an incentive to achieve an annexation agreement (that is unrelated to water) - it is a misuse of those funds since it isn't in the best interest of the enterprise fund.

Here is another example. If you have a business and deduct your expenses from the income - the IRS requires those expenses be real. You cannot pay higher than market rate (for example) to a gardner as a business expense in exchange for that company cutting the grass at your private residence for free. This means you really didn't incur the entire business expense but really were paying for personal expenses.

Anyone notice the nervous answers from the water enterprise fund manager when asked whether the price for the water shares were "market rate."? He refused to admit in public that the water enterprise fund was being used for grease payments to achieve an annexation.

Has anyone talked to the Independence Institue about this?
--Walter
2008-05-08 16:10:12 GMT
Author:Anonymous
I think they are calculating future projected tax revenue as "payback" for the city. Than they say the total outlay is $800,000.

A curious issue was the City Manager admitting he was raiding the enterprise funds to pay for the water share subsidies. I don't believe this is a legal use of an enterprise fund.

An enterprise fund is required to use the monies collected from users only to provide that the service. Otherwise, for example, an increase in the water rates would require a vote before it could be inacted (under TABOR)since it would really be a general tax and not a fee for a specific service.

When you intentionally pay over market rate for water shares as an incentive to achieve an annexation agreement (that is unrelated to water) - it is a misuse of those funds since it isn't in the best interest of the enterprise fund.

Here is another example. If you have a business and deduct your expenses from the income - the IRS requires those expenses be real. You cannot pay higher than market rate (for example) to a gardner as a business expense in exchange for that company cutting the grass at your private residence for free. This means you really didn't incur the entire business expense but really were paying for personal expenses.

Anyone notice the nervous answers from the water enterprise fund manager when asked whether the price for the water shares were "market rate."? He refused to admit in public that the water enterprise fund was being used for grease payments to achieve an annexation.

Has anyone talked to the Independence Institue about this?
--Walter
2008-05-08 16:10:25 GMT
Author:Anonymous
Yes- we actually had this discussion. The CM said enough funds are coming from General Fund money to preclude any challenge of malfeasance in our use of enterprise dollars for the annexation incentive.
2008-05-08 18:38:52 GMT
Author:Anonymous
Oh, yes because Don Williams says its so it must be true. This by the administration that brought us the 1/2 billion subsidy of McW. Oh, Rousey, by the way, where are all those regional road improvements they were supposed to do? Kendal Parkway, they have built a spine road serving their development, that's all we've ever gotten or will get from McW. Keep up the good work!!!!
2008-05-09 04:41:30 GMT
Author:Anonymous
Check the article from yesterday's newspaper...improvements to I-25/34 were announced with a diagram of the work to be done.

Nothing, however, to do with this issue.
--ouch/rousey
2008-05-09 12:49:32 GMT
Author:Anonymous
You know damn well all of that is just an interim fix for things that should have been done 10 years ago and that barely addresses current traffic let alone future traffic. I've had that argument before with you, you keep forgetting I know all the dirty little stinking secrets of how the City is run. And yes its well on the topic of developer subsidies that have little public benefit.
2008-05-10 03:23:17 GMT
Author:Anonymous
Ouch/Rousey showing nothing but contempt and disrespect for the voter and taxpayer?

It's business as usual in the City of Loveland.
2008-05-10 10:15:29 GMT
Author:Anonymous
I want everyone to know who reads this blog the supposed road "improvements" that were announced are only interim repairs. The U.S. 34/I25 interchange is seriously deficient, anyone that has used it knows well the problems with this interchange, its dangerous, as is Crossroads which is actually in its current configuration is a "rural" interchange design that is also a threat to public safety in its current use and design for urban development. Both interchanges need to be completely reconfigured and redeveloped into full interchanges, all of which should have been done before now over several million square feet of development have been added over the last 10 ywears. The current improvements are little more than repairs and do little to address the long standing deficiencies of these interchanges. Tell the truth Rousey, if you still know what it looks like. This topic, among others deserves a separate investigation and blog topic so excuse me if I get a bit off topic here but these improvement were neglegted so that McW could build Kendal parkway through their project as an amended provsion to the URA agreement which initially only identified these interchanges and Crossroads Blvd. as regional improvments. Kendal Blvd. serves only McW development and was added as an amendment to the original URA agreement with no public involvement, it went through on the consent agenda, a neat little trick of this Council.
2008-05-10 16:09:53 GMT
Author:Anonymous
I might agree with Mr. Solt that we are paying too much for this, but ultimately this is still the right thing to do.

Maybe the there could have been more debate, maybe it could have been handled a bit differently, maybe we're not up against a wall and this was rushed through a bit.

Regardless of that though, HWY 34 and HWY 402 are both strategic, necessary locations on I-25 that need to include Loveland in the mix.

Are there issues in the details? Sure. Can those most of those be worked out in the 10-20-30 years before it makes sense for the 402 & I-25 interchange to be commercially developed? Definitely.

I'd rather that maybe not everything was worked out absolutely perfectly and bureaucratically as it could have if it ensures Loveland's border includes I-25 and HWY 402.

Let's not lose our view of the greater picture by only focusing on the details. It is unfortunate that the issue seems to be lost on details and somehow the McWhinney bashing always enters no matter what the subject may have been.

Let's say maybe we could have saved $500k to $1M if this had been handled differently, I'm not suggesting that's possible or not, but use it as an example. Would the rist of saving that versus losing tens of millions or hundreds of millions of dollars in the local economy have been worth it 30 years from now?

Its not contempt or disrespect to the taxpayer to want to bring both private and public income into the city you live in to improve the economy and the lives of those around you. It does involve risk management, and you can never make everyone happy in any decision. There will always be some mistakes, but the important thing is that you get the greater scale issue at hand correct.
--Derrick Barnes
2008-06-03 21:33:50 GMT
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